The Efficiency of Foreign and Domestic Banks in Central and Eastern Europe: Evidence on Economies of Scale and Scope

Green, Christopher J.; Murinde, Victor; Ivaylo, Nikolov

Abstract

We model the efficiency of domestic and foreign banks in Central and Eastern Europe, in terms of economies of scale and scope. We estimate and test the model on a panel of 273 foreign and domestic banks located in nine European transition economies during 1995-99. The main findings are threefold. First, overall, banks in the sample economies exhibit a reasonable degree of efficiency. Second, we generally reject the hypothesis that foreign banks are more efficient than domestic banks in these economies. Third, foreign ownership is hardly an important factor in reducing the banks’ total costs.

Citation

Green, C. J., Murinde, V., & Ivaylo, N. (2004). The Efficiency of Foreign and Domestic Banks in Central and Eastern Europe: Evidence on Economies of Scale and Scope. Journal of Emerging Market Finance, 3(2), 175-205. https://doi.org/10.1177/097265270400300205

• Journal Article Type: Article
• Publication Date: Jan 1, 2004
• Deposit Date: May 21, 2017
• Journal: Journal of Emerging Market Finance
• Print ISSN: 0972-6527
• Electronic ISSN: 0973-0710
• Publisher: SAGE Publications
• Peer Reviewed: Peer Reviewed
• Volume: 3
• Issue: 2
• Pages: 175-205
• DOI: https://doi.org/10.1177/097265270400300205